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At
EMBED Word.Picture.8NEW DELHI
Prepared by
SOHAIL AHMAD07MBA-57
Under the Guidance of
MR. SARFARAZ AHMED KHAN(Asst. Manager, Consumer Transaction Banking,
Retail Liabilities)
Submitted in partial fulfillment of the degree of
Master of Business Administration
Department of Business
Administration
Faculty of Management Studies
and Research
Aligarh Muslim University, Aligarh.
(2007-2009)
http://www.standardchartered.com/http://www.standardchartered.com/ -
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DECLARATION
I hereby declare that the project work entitled INVESTMENT ANALYSIS AND
PORTFOLIO MANAGEMENT submitted by me for the partial fulfillment of degree
of Master of Business Administration, Faculty of Management studies And Research,
Aligarh Muslim University, This is my own original work and has not been submitted
earlier either to this institute or any other institute for the fulfillment of the
requirement for any course of study. I also declare that no part of this manuscript is
incorporated from earlier/ other work done by me or others.
Place : AligarhName of student : Signature of student
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ACKNOWLEDGEMENT
I bow in reverence of Almighty Allah, the most Merciful who showed his gracious
blessing upon me, showed me the path of righteousness and enabled me to achieve
this target.
I feel immense gratitude and indebtness to respected Prof. Pervaiz Talib, Summer
Training Incharge, Department of Business Administration, Aligarh Muslim
University, Aligarh who made all the arrangements of our summer training
placement.
I owe a deep sense of gratitude to my supervisor Mr. Sarfaraz Ahmed Khan (Asst.
Manager, Consumer Transaction Banking, Retail Liabilities) who devoted his
valuable time in guiding me about the crux of my project and encouraging me for the
way of tackling the work.
My special thank to Mr. Abhishek Bansal, (Area Sales Manager-HNI, Consumer
Transaction Banking), Standard Chartered Bank, who has been a source of inspiration
for me.
I also express my gratitude to my parents, teachers and friends who boosted my
morale and confidence that helped me in various ways to complete this work.
SOHAIL AHMAD
Table of contents
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Particulars page no.
Declaration2
Acknowledgement3
Executive Summary..6
Industry profile 7
Company Profile ..9
Business of the Company....13
Customers of the Company......14
Achievement of the Company & used technology..... .14
An Overview of the Investment.. 15
Need for the study....16
Objectives of the study.. .17
Research methodology........18
Research problems....18
Research design....18
Sample size...18
Source of data....18
Data collection...19
Data processing.... 19
Statistical tools used..19
Findings of Questionnaire...21
Data Analysis.26
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Hypothesis... .26
Pie charts and bar graphs....36
Limitations46
Conclusions...47
Recommendations... .48
Exhibit...49
Bibliography..51
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EXECUTIVE SUMMARY
Globalization today is based on four important pillars viz ,trade in goods and services,
flow of capital and movement of human beings across boundaries,
harmonization of regulatory framework in different countries; and
development in technology, particularly those in information technology.
And naturally, globalization of economies can not take place without commensurate
globalization of the banking sector. In fact, the banking sector is at the very center of
the
globalization process. It is through this sector that capital and money flows, giving
substance to the globalization process.
For the purpose to know the capital and money flow of people I did a research on the
investment strategy of people and also to know how much they are comfortable with
the
various investment instruments available to them.
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INDUSTRY PROFILE
The growth in the Indian Banking Industry has been more qualitative than quantitative
and it is expected to remain the same in the coming years. Based on the projectionsmade in the "India Vision 2020" prepared by the Planning Commission and the Draft
10th Plan, the report forecasts that the pace of expansion in the balance-sheets of
banks is likely to decelerate. The total assets of all scheduled commercial banks by
end-March 2010 is estimated at Rs 40,90,000 crores. That will comprise about 65 per
cent of GDP at current market prices as compared to 67 per cent in 2002-03. Bank
assets are expected to grow at an annual composite rate of 13.4 per cent during the
rest of the decade as against the growth rate of 16.7 per cent that existed between
1994-95 and 2002-03. It is expected that there will be large additions to the capital
base and reserves on the liability side.
The Indian Banking Industry can be categorized into non-scheduled banks andscheduled banks. Scheduled banks constitute of commercial banks and co-operative
banks. There are about 67,000 branches of Scheduled banks spread across India. As
far as the present scenario is concerned the Banking Industry in India is going through
a transitional phase.
The Public Sector Banks (PSBs), which are the base of the Banking sector in India
account for more than 78 per cent of the total banking industry assets. Unfortunately
they are burdened with excessive Non Performing assets (NPAs), massive manpower
and lack of modern technology. On the other hand the Private Sector Banks are
making tremendous progress. They are leaders in Internet banking, mobile banking,
phone banking, ATMs. As far as foreign banks are concerned they are likely tosucceed in the Indian Banking Industry.
In the Indian Banking Industry some of the Private Sector Banks operating are IDBI,
ING Vyasa Bank, SBI Commercial and International Bank Ltd, Bank of Rajasthan
Ltd. and banks from the Public Sector include Punjab National bank, Vijaya Bank,
UCO Bank, Oriental Bank, Allahabad Bank among others. ANZ Grindlays Bank,
ABN-AMRO Bank, American Express Bank Ltd, Citibank are some of the foreign
banks operating in the Indian Banking Industry.
Public Sector banks that imbibe new concepts in banking, turn tech savvy, leaner and
meaner post VRS and obtain more autonomy by keeping governmental stake to the
minimum can succeed in effectively taking on the private sector banks by virtue of
their sheer size. Weaker PSU banks are unlikely to survive in the long run.
Consequently, they are likely to be either acquired by stronger players or will be
forced to look out for other strategies to infuse greater capital and optimize their
operations.
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Foreign banks are likely to succeed in their niche markets and be the innovators in
terms of technology introduction in the domestic scenario. The outlook for the private
sector banks indeed looks to be more promising vis--vis other banks. While their
focused operations lower but more productive employee force etc will stand them
good, possible acquisitions of PSU banks will definitely give them the much needed
scale of operations and access to lower cost of funds. These banks will continue to bethe early technology adopters in the industry, thus increasing their efficiencies.
Also, they have been amongst the first movers in the lucrative insurance segment.
Already, banks such as ICICI Bank, HDFC Bank and Standard Chartered Bank have
forged alliances with Prudential Life, Standard Life and Bajaj Allianz respectively.
This is one segment that is likely to witness a greater deal of action in the future. In
the near term, the low interest rate scenario is likely to affect the spreads of majors.
This is likely to result in a greater focus on better asset-liability management
procedures. Consequently, only banks that strive hard to increase their share of fee-
based revenues are likely to do better in the future.
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COMPANY PROFILE
STANDARD CHARTERED BANK
Standard Chartered is the world's leading emerging markets bank headquartered in
London. Its businesses however, have always been overwhelmingly international.
This is summary of the main events in the history of Standard Chartered and some of
the organizations with which it merged.
The Early Years:
Standard Chartered is named after two banks that merged in 1969. They were
originally known as the Standard Bank of British South Africa and the Chartered
Bank of India, Australia and China. Of the two banks, the Chartered Bank is the olderhaving been founded in 1853 following the grant of a Royal Charter from Queen
Victoria. The moving force behind the Chartered Bank was a Scot, James Wilson,
who made his fortune in London making hats. James Wilson went on to start The
Economist, still one of the world's pre-eminent publications.
Nine years later, in 1862, the Standard Bank was founded by a group of businessmen
led by another Scot, John Paterson, who had immigrated to the Cape Province in
South Africa and had become a successful merchant. Both banks were keen to
capitalize on the huge expansion of trade between Europe, Asia and Africa and to reap
the handsome profits to be made from financing that trade.
The Chartered Bank opened its first branches in 1858 in Calcutta and Mumbai. A
branch opened in Shanghai that summer beginning Standard Chartered's unbroken
presence in China. The following year the Chartered Bank opened a branch in Hong
Kong and an agency was opened in Singapore.
In 1861 the Singapore agency was upgraded to a branch which helped provide finance
for the rapidly developing rubber and tin industries in Malaysia.
In 1862 the Chartered Bank was authorized to issue bank notes in Hong Kong.
Subsequently it was also authorized to issue bank notes in Singapore, a privilege itcontinued to exercise up until the end of the 19th Century. Over the following decades
both the Standard Bank and the Chartered Bank printed bank notes in a variety of
countries including China, South Africa, Zimbabwe, Malaysia and even during the
siege of Making in South Africa. Today Standard Chartered is still one of the three
banks which print Hong Kong's bank notes.
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Expansion in Africa and Asia:
The Standard Bank opened for business in Port Elizabeth, South Africa, in 1863. It
pursued a policy of expansion and soon amalgamated with several other banks
including the Commercial Bank of Port Elizabeth, the Colesberg Bank, the British
Kaffarian Bank and the Fauresmith Bank.
The Standard Bank was prominent in the financing and development of the diamond
fields of Kimberly in 1867 and later extended its network further north to the new
town of Johannesburg when gold was discovered there in 1885. Over time, half the
output of the second largest goldfield in the world passed through the Standard Bank
on its way to London.
In 1892 the Standard Bank opened for business in Zimbabwe, and expanded into
Mozambique in 1894, Botswana in 1897, Malawi in 1901, Zambia in 1906, Kenya,
Zanzibar and the Democratic Republic of Congo (D.R.C.), in 1911 and Uganda in1912. Of these new businesses, Botswana, Zanzibar and the D.R.C. proved the most
difficult and the branches soon closed. A branch in Botswana opened again in 1934
but lasted for only a year and it was not until 1950 that the Bank re-opened for
business in Botswana.
In Asia the Chartered Bank expanded opening offices in, Myanmar in 1862, what is
now Pakistan and Indonesia in 1863, the Philippines in 1872, Malaysia in 1875, Japan
in 1880 and Thailand in 1894. Some 34 years after the Chartered Bank appointed an
agent in Sri Lanka it opened a branch in 1892 to take advantage of business from the
tea and rubber industries. During 1904 a branch opened in Vietnam. Both the
Chartered and the Standard Bank opened offices in New York and Hamburg in theearly 1900s. The Chartered Bank gain the first branch license to be issued to a foreign
bank in New York.
The Impact of War:
Even the First World War offered opportunities for expansion when the Standard
Bank set up a branch in Tanzania shortly after British troops occupied the formerly
German administered Dar es Salaam in September 1916. Both banks survived the
inter-war years but the world trade slump led to the closure of operations in the
Canary Islands, Liberia, the Netherlands, and Equatorial Guinea. Disaster struck the
Chartered Bank's office in Yokohama, Japan, when an earthquake destroyed it in 1923killing a number of staff. The Second World War particularly affected the Chartered
Bank when Japan occupied numerous Asian countries.
The Post War Years:
After the Second World War many countries in Asia and Africa gained their
independence. This led to local incorporation in some countries, particularly in Africa.
Other operations such as those in Iraq, Angola, Myanmar and Libya were
nationalized, while in Indonesia the Jakarta office was destroyed in an attempted coup
d'etat. In 1948 the Chartered Bank opened in Bangladesh and during 1957 it acquiredthe Eastern Bank. The Eastern Bank gave the Chartered Bank a network of branches
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including Aden, Bahrain, Beirut, Cyprus, Lebanon, Qatar and the United Arab
Emirates. The Chartered Bank also entered into a joint venture to form the Irano-
British Bank, which opened for business in 1959. The bank grew rapidly and had 24
branches when it was nationalized in 1981.
By the mid 1950s the Standard Bank had around 600 offices in Southern, Central andEastern Africa. Its network grew substantially in 1965 when it merged with the former
Bank of British West Africa, which had some 60 branches in Nigeria, 40 branches in
Ghana and eleven branches in Sierra Leone in addition to operations in Cameroon and
Gambia. Despite these acquisitions and expansion into new countries such as Mexico,
South Korea and Oman (1968), both the Standard and Chartered Bank networks were
comparatively small. Both viewed the future with some trepidation as the need to
protect them from acquisition became ever more apparent.
Standard Chartered PLC In 1969 the decision was made by the Standard Bank and the
Chartered Bank to undergo a friendly merger thus forming Standard Chartered PLC.
It was one year later that the descendants of the "Chartered Bank of India, Australiaand China" were finally permitted to open a representative office in Sydney,
Australia. Standard Chartered subsequently acquired the UK based Hodge Group, in
which it already had a minority shareholding, and the Wallace Brothers Group. The
Hodge Group brought to Standard Chartered an extensive network of UK offices
specializing in installment credit and industrial leasing, and after a period of
rationalization its name was changed to Chartered Trust Limited. Standard Chartered's
operations in Jersey emerged from the integration of other Hodge Group businesses
with those of Wallace Brothers Bank (Jersey), Limited.
Standard Chartered decided, after the merger, to expand the Group outside its
traditional markets. In Europe a number of offices were opened including Austria,
Belgium, Denmark, Ireland, Spain and Sweden as well as several major cities in the
UK. Standard Chartered also opened offices in Argentina, Canada, Colombia, the
Falkland Islands, Panama and Nepal. In the USA a number of offices were opened
and three banks were acquired. These included the Union Bank of California, which
gave Standard Chartered a presence in Brazil and Venezuela. The opening of a branch
in Istanbul in 1986 was overshadowed by a far more dramatic event when Lloyds
Bank of the UK made a hostile take-over bid for Standard Chartered. Standard
Chartered won its right to remain independent but entered into a period of
considerable change.
By the late 1980s Standard Chartered already had considerable exposure to third
world debt. To this were added provisions against loans to corporations and
entrepreneurs who could not meet their commitments. Standard Chartered reviewed
its operations and decided to focus on its core strengths of Consumer Banking,
Corporate & Institutional Banking and Treasury in its well-established operations in
Asia, Africa and the Middle East. This led to a series of divestments notably in
Europe, the United States and Africa. During this time staff numbers were reduced;
businesses not considered core were sold or closed; associate holdings disposed of;
unprofitable branches closed and back office functions consolidated. In addition
expensive buildings were sold with the proceeds reinvested in the business, and the
senior management team was radically changed and strengthened.
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Standard Chartered in the 1990s
Even within this period of apparent retrenchment Standard Chartered expanded its
network, re-opening in Vietnam in 1990, Cambodia and Iran in 1992, Tanzania in
1993 and Myanmar in 1995. With the opening of branches in Macau and Taiwan in
1983 and 1985 plus a representative office in Laos (1996), Standard Chartered nowhas an office in every country in the Asia Pacific Region with the exception of North
Korea.
In 1998 Standard Chartered concluded the purchase of a controlling interest in Banco
Exterior de Los Andes (Extebandes), an Andean Region bank involved primarily in
trade finance. With this purchase Standard Chartered now offers full banking services
in Colombia, Peru and Venezuela. In 1999, Standard Chartered acquired the global
trade finance business of Union Bank of Switzerland. This acquisition makes
Standard Chartered one of the leading clearer of dollar payments in the USA.
Standard Chartered also opened a new subsidiary, Standard Chartered Nigeria Limited
in Lagos, acquired 75 per cent of the equity of Nakornthon Bank, Thailand; and
agreed terms to acquire 89 per cent of the share capital of Metropolitan Bank of the
Lebanon.
Standard Chartered today
Today Standard Chartered is the world's leading emerging markets bank employing
30,000 people in over 500 offices in more than 50 countries primarily in countries in
the Asia Pacific Region, South Asia, the Middle East, Africa and the Americas. The
new millennium has brought with it two of the largest acquisitions in the history ofthe bank with the purchase of Grindlays Bank from the ANZ Group and the
acquisition of the Chase Consumer Banking operations in Hong Kong in 2000.
These acquisitions demonstrate Standard Chartered firm committed to the emerging
markets, where it has a strong and established presence and where it sees its future
growth. Standard Chartered employs 30,000 people in over 500 locations in more than
50 countries in the Asia Pacific Region, South Asia, the Middle East, Africa, the
United Kingdom and the Americas. It is one of the world's most international banks,
with a management team comprising 70 nationalities. Standard Chartered is listed on
both the London Stock Exchange and the Stock Exchange of Hong Kong and is in the
top 25 FTSE-100 companies, by market capitalization. It serves both Consumer andWholesale Banking customers. Consumer Banking provides credit cards, personal
loans, mortgages, deposit taking and wealth management services to individuals and
small to medium sized enterprises. Wholesale Banking provides corporate and
institutional clients with services in trade finance, cash management, lending, custody,
foreign exchange, debt capital markets and corporate finance.
Standard Chartered is well-established in growth markets and aims to be the right
partner for its customers. The Bank combines deep local knowledge with global
capability. The Bank is trusted across its network for its standard of governance and
its commitment to making a difference in the communities in which it operate.
Standard Chartered Bank serves both Consumer and Wholesale Banking customers.
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Consumer Banking provides credit cards, personal loans, mortgages, deposit taking
and wealth management services to individuals and small to medium sized
enterprises.
Wholesale Banking provides corporate and institutional clients with services in tradefinance, cash management, lending, custody, foreign exchange, debt capital markets
and corporate finance.
BUSINESS OF THE COMPANY
Standard Chartered operates in many of the world's fastest growing markets, and
derives over 90 per cent of its profits from the emerging trade corridors of Asia,
Africa and the Middle East.
To meet the diverse needs of our customers, Standard Chartered also offers a broad
range of Products and Services:
INSURANCE
MUTUAL FUNDS
SAVING ACCOUNTS
FIXED DEPOSITS
EQUITY
IPO
LOANSCOMMODITY
FOREIGN EXCHANGE
TELEBANKING
MOBILE BANKING
CREDIT CARDS
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CUSTOMERS OF THE COMPANY
Understanding that each customer's needs are unique, Standard Chartered customizes
Client Solutions for risk management, yield enhancement, liquidity management and
debt financing.
Standard chartered bank gives attention towards customer relationship management
(CRM). CRM enable it to get the root cause of customer problems and issues much
faster and, hence, address customer complaints proactively and rapidly.
The shift from branch counter to e-channels has indeed enhanced customer service
and convenience. It solves the problem of customer through interactive voice response
systems/ call centers.
ACHIEVEMENT OF THE COMPANY AND TECHNOLOGYUSED:
Standard Chartered Bank is the fastest growing private sector financial services
company in India. It is adopting various prudential accounting norms for classification
of assets, income recognition and loan loss provisioning, latest IT innovation and
revising its existing business model to stand firm in this cut throat competition. It
combines an in-depth knowledge of local markets with global product expertise to
offer effective financial solutions. The company is using advertisements, kiosks as
well as Internet to facilitate services.
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AN OVERVIEW OF THE INVESTMENT
In its broadest sense, an investment is a sacrifice of current money or other resources
for future benefits. Numerous avenues of investment are available today. You can
either deposit money in a bank account or purchase a long term government bond orinvest in the equity shares of a company or contribute to a provident fund account or
buy a stock option or acquire a plot of land or invest in some other form.
The two key aspects of any investment are time and risk. The sacrifice takes place
now and is certain. The benefit is expected in the future and tends to be uncertain. In
some investments (like government bonds) the time element is the dominant attribute.
In other investments (like stock options) the risk element is the dominant attribute. In
yet other investments (like equity shares) both time and risk are important.
Almost everyone owns a portfolio of investments. The portfolio is likely to comprise
financial assets (bank deposits, bond, stocks, and so on). The portfolio may be resultof a series of a haphazard decision or may be the result of deliberate and careful
planning.
The economic well- being in the long run depends significantly on how wisely or
foolishly one invests. An investor has a wide array of investment alternatives
available to you. Viz. Non-marketable Financial assets, Equity shares, Bonds, Money
market instruments, Mutual Funds Life Insurance, Real Estate, Precious Objects and
Financial Derivatives.
The game of the investment, as any other game, requires certain qualities and virtues
on the part of the investors. These are as follows: contrary thinking, patience,composure, flexibility and openness, and decisiveness.
The commonly stated investment goals are:-
Income: To provide a steady stream of income through regular interest/ dividend
payment.
Growth: To increase the value of the principal amount through capital appreciation.
Stability: To protect the principal amount investment from the risk of loss.
Since income and growth represent two ways by which return is generated and
stability implies containment or even elimination of risk. Interested in high return andlower risk.
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NEED FOR THE STUDY
In fact, the banking sector is at the very center of the globalization process. It isthrough this sector that capital and money flows, giving substance to the globalization
process.
For the purpose to know the capital and money flow of people I did a research to
know the investment strategy of people and also to know how much they are
comfortable with the various investment instruments available to them, what the
motive factors are there by which investment decisions are influenced, whether high
income category prefer much risk in comparison to lower income people, whether age
has any effect on investment strategy of people, which category of employee prefer
which investment instruments, what attitudes do employees have towards investment
instruments available to them.
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OBJECTIVES OF THE STUDY
To understand investment strategies of the people.
To find that whether income has any effect in choosing investment instruments.
To compare the risk profile of different categories of employee
To know those whether male are more risk taker or female.
To find the appropriate customers for various instruments available.
To help me widen my perspective by an exposure to real life organizational and
environmental situations.
To help the company to find its appropriate customers for the investment instruments
available.
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RESEARCH METHODOLOGY
Research Problems:
Does age of people has any relationship with the investment instruments available?
Does income of people has any relationship with the investment instruments
available?
Does gender of people has any relationship with the investment instruments available?
Does employee category of people has any relationship with the investment
instruments available?
Does risk profile has any relationship with the investment instruments available?
Research design:
Methodology used for data collection in this study is survey. Survey is a research
technique in which information is gathered from a sample of people by the use of a
questionnaire or interview; a method of data collection based on communication with
a representative sample of individuals.
Sample Size:
The information was collected from 122 respondents from different places of South
Delhi, constituting it to be the sample size. People were chosen randomly from
different places such as Shopping malls, shops, hospitals, court, offices, educational
institutes, etc.
SOURCE OF DATA
PRIMARY DATA:
Primarily data was collected through questionnaires which were made to filled up by
different people from South Delhi Region, it was done in purely random manner and
according to my own convenience i.e. going to different people at different places ,
belonged to different income groups, gender, age group, profession etc.
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Data Collection:
Questionnaire was the instrument chosen for data collection in this study. Questions
were structured (non- disguising), closed ended type.
Data processing
A number of tables and charts were prepared to bring the main characteristics of the
collected data. Inferences were drawn from the data collected and charts and diagrams
were shown wherever necessary. A hypothesis study was made.
Statistical tools used:
Collected data was entered in SPSS software datasheet, for various descriptive
statistical analyses. I used various tools:-
Pie Charts:A pie chart is useful for comparing proportions. For example, you may use a pie chart
to demonstrate that a greater proportion of women are enrolled in a certain class.
Pie Chart produces a pie chart for each variable named on the variable subcommand.
By default, one slice corresponds to each category defined by the variable with one
slice representing all missing values. Pie chart are labeled with value labels or withthe value if no label is defined.
Bar Charts:
A bar chart, also known as a bar graph, is a chart with rectangular bars of lengthsproportional to that value that they represent. Bar charts are used for comparing two
or more values. The bars can be horizontally or vertically oriented. Sometimes a
stretched graphic is used instead of a solid bar.
They were used as they are really helpful in representing data in a clearer manner
graphically which is quite easier to understand.
Cross Tabulation Tables:Cross tabulation was done in order to know the exact relationship between different
variables. It was achieved using counts as well as percentage. It shows us the real
picture how different variables are related but the significance of their relationship
was yet to be seen. Use of percentage showed us the clear picture which exists
between High Income or Age and Life style diseases.
Chi Square test:Although there may appear some kind of relationship between the two variables, is
there any reason to believe that the relationship between high income group orgrowing age and investments is style anything more than random variation?
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In order to do Significance testing of cross table analysis i.e. to know whether the
variables are independent of each other or they share any relationship and if they do
then how significant that is. This test tells us the significance of relationship between
two or more variables. The best thing about this test is, it is suitable to any kind of
data.Since in this particular research, we have to find out the significance of relationship
between two variables, so this kind of tool is really effective in this regard.
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FINDINGS OF QUESTIONNAIRE:
Q.1, which category do you belong to?
When it was asked from the respondents, their responses were found as majority of
them i.e., 37 were businessman followed by 31 government employees, 29 private
employee and 25 self employed.
Q.2, which age category do you belong to?
age catogory
55
41
16
10
0
10
20
30
40
50
60
below 30 31-40 41-50 above 51age group
no.ofrespond
Series1
Out of 122 respondents 55 were below 30, 41 were between 31 to 40,16 were between
41 and 50 and the rest 10 were of above 51 years of age.
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Q.3, Your gender?
Out of 122 respondents 93 were male and 29 were female.
Q.4 In which investment instruments do you mostly like to invest?
Majority of male respondents showed their interest in insurance, stocks and mutual
funds, whereas majority of females showed their interest in bank deposits and gold.
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Q. 5 Which annual income group do you belong to?
out of total respondents, 45 were under the slab of 3-5 lakhs, 41 were more than 5
lakhs, 28 were between 1-3 lakhs and the rest 8 were of less than 1 lakh of income
group.
Q.6 What is the level of risk you can withhold while making investment?
Out of 122 respondents, 44 could withhold low risk, 41 moderate and rest 37 could
withhold high risk.
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Q.7 What kind of investment do you like?
When respondents were asked about investment term, majority of them i.e., 65 %
showed their interest in short term and 21 % in long term, whereas 14 % were
unaware whether to invest in long term or short term investment instruments.
Q.8 Which thing you consider most while making investment decisions ?
From this chart, it is clear that 42 respondents considered expected growth as one of
the important factor while making investment decisions, however, 41 of them
considered expected return, 25 expected risk while very few i.e., 14 considered
expected value on their investments.
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Q.9 What feature or flexibility you expect from investment companies?
When respondents were asked about features or flexibility expected, majority of them
told about less policy period and low premium whereas few of them told about return.
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DATA ANALYSIS
HYPOTHESIS
1 solution:-
Null Hypothesis (H0): There is no significant relationship between age of peopleand investment instruments available
Alternative Hypothesis (H1): There is a significant relationship between age ofpeople and investment instruments available
Case Processing Summary
Cases
Valid Missing Total
N Percent N Percent N Percent
INSTRUMENTS *
AGE122 100.0% 0 .0% 122 100.0%
AGE GROUP (YEARS)
below 30 31-40 41-50 51-above TOTAL
Instruments
Bank deposit 9 8 4 3 24
PO Scheme 7 3 2 1 13
Stock 17 6 2 2 27Mutual Fund 9 2 2 0 13
Govt. Securities 4 3 1 1 9
Gold 2 2 1 0 5
Insurance 7 17 4 3 31
TOTAL 55 41 16 10 122
In this cross tabulation we find that people of low age category prefer to invest in
securities markets. But higher age category prefers to go more with bank deposits and
insurance.
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Chi-Square Tests
Value df Asymp. Sig. (2-sided)Pearson Chi-Square 24.328a 18 .145
Likelihood Ratio 29.422 18 .043
N of Valid Cases 122
In this case, Pearson chi-square tests the first hypothesis that the row and column
variables are dependent. The actual value of the statistic isn't very informative.
The significance value (Asymp. Sig.) has the information we're looking for. The
lower the significance value, more are the chances that the two variables are
dependent (related).
Here,
p-value = 0.145 > 0.05
So, we accept the null hypothesis.
The significance value is high in this case, that it is displayed as .145 which means
that it would appear that the two variables are, unrelated. A value less than .05 is
considered to be a sign of significant relationship between two variables i.e. it tells usthat they are dependent (related).
So, in this case due to the high value of Asymp. Sig., we conclude that there is no
significant relationship between Age and Investment Instruments available.
2 Solution :
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Null Hypothesis (H0): There is no significant relationship between income andinvestment instruments available
Alternative Hypothesis (H1): There is a significant relationship between incomeand investment instruments available
Case Processing Summary
Cases
Valid Missing Total
N Percent N Percent N Percent
INSTRUMENTS *
INCOME122 100.0% 0 .0% 122 100.0%
INCOME GROUP (in Rs)
Instruments below 1 lakh 1-3 lakh 3-5 lakh 5 lakh-above TOTAL
Bank deposit 7 10 5 2 24
PO Scheme 1 5 4 3 13
Stock 0 3 10 14 27
Mutual Fund 0 0 6 7 13Govt.
Securities 0 1 5 3 9
Gold 0 1 4 0 5
Insurance 0 8 11 12 31
TOTAL 8 28 45 41 122
In this cross tabulation, we find that people of low income group go for smallinvestment like bank deposits and post office schemes but as income increases their
preference for investment changes and they prefer to invest in security market, like
stock and mutual fund.
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3 Solution :-
Null Hypothesis (H0): There is no significant relationship between gender andinvestment instruments available
Alternative Hypothesis (H1): There is a significant relationship between genderand investment instruments available
Case Processing Summary
Cases
Valid Missing Total
N Percent N Percent N Percent
INSTRUMENTS *
GENDER100 100.0% 0 .0% 100 100.0%
Instruments GENDER
MALE FEMALE TOTAL
Bank deposit 12 12 24
PO Scheme 9 4 13
Stock 25 2 27
Mutual Fund 13 0 13
Govt. Securities 6 3 9
Gold 0 5 5Insurance 28 3 31
TOTAL 93 29 122
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Here,
p-value = 0.000 < 0.05
So, we reject the null hypothesis.
The significance value is less in this case, that it is displayed as .000 which means that
it would appear that the two variables are, related. A value less than .05 is considered
to be a sign of significant relationship between two variables i.e. it tells us that they
are dependent (related).
So, in this case due to the low value of Asymp. Sig., we conclude that there is
significant relationship between gender and Investment Instruments available. i.e. by
cross tabulation table we find that female generally go for small saving instruments
like post office, bank deposits and also for gold, on the other hand male prefer to
invest in securities market like shares, stocks having no interest in gold.
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 33.906a 6 .000
Likelihood Ratio 35.143 6 .000
N of Valid Cases 122
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4 Solution :-
Null Hypothesis (H0): There is no significant relationship between employeecategory and investment instruments available
Alternative Hypothesis (H1): There is a significant relationship betweenemployee category and investment instruments available
Case Processing Summary
Cases
Valid Missing Total
N Percent N Percent N Percent
INSTRUMENTS *
EMPPLOYEE122 100.0% 0 .0% 122 100.0%
Employee category
Instruments
govt.
employee
private
employee self employed businessman TOTAL
Bank deposit 5 12 5 2 24PO Scheme 3 6 3 1 13
Stock 1 10 5 11 27
Mutual Fund 0 3 3 7 13
Govt. Securities 4 2 2 1 9
Gold 1 2 2 0 5
Insurance 17 4 5 5 31
TOTAL 31 29 25 37 122
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Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 41.764a 12 .000
Likelihood Ratio 45.100 12 .000
N of Valid Cases 122
In this case, the significance value (Asymp. Sig.) is .000. The lower the significance
value, more are the chances that the two variables are dependent (related).
p-value = 0.000 < 0.05
So, we reject the null hypothesis.
The significance value is more in this case, that it is displayed as .000 which means
that it would appear that the two variables are related. A value less than .05 isconsidered to be a sign of significant relationship between two variables i.e. it tells us
that they are dependent (related).
So, in this case due to the low value of Asymp. Sig., we conclude that there is
significant relationship between employee category and Investment Instruments
available.
By the cross tabulation table we find that government employees generally go for
insurance in comparision to private or self-employed people.
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5 Solution :-
Null Hypothesis (H0): There is no significant relationship between investmentinstruments and risk profile
Alternative Hypothesis (H1): There is a significant relationship betweeninvestment instruments and risk profile
Case Processing Summary
Cases
Valid Missing Total
N Percent N Percent N Percent
INSTRUMENTS * RISK 122 100.0% 0 .0% 122 100.0%
Risk Profile
Instruments High Moderate Low TOTAL
Bank deposit 0 7 17 24
PO Scheme 1 5 7 13
Stock 25 2 0 27
Mutual Fund 9 4 0 13
Govt. Securities 3 4 2 9
Gold 0 2 3 5
Insurance 6 17 8 31
TOTAL 44 41 37 122
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Chi-Square Tests
Value df
Asymp. Sig. (2-
sided)
Pearson Chi-Square 74.657a
12 .000Likelihood Ratio 86.587 12 .000
N of Valid Cases 122
In this case, the significance value (Asymp. Sig.) is .000. The lower the significance
value, more are the chances that the two variables are dependent (related).
p-value = 0.000 < 0.05
So, we reject the null hypothesis.
The significance value is less in this case, that it is displayed as .000 which means that
it would appear that the two variables are, related. A value less than .05 is considered
to be a sign of significant relationship between two variables i.e. it tells us that they
are dependent (related).
So, in this case due to the low value of Asymp. Sig., we conclude that there issignificant relationship between risk profile and Investment Instruments available. i.e.
by cross tabulation table we find that people of high risk profile prefer to invest in
stocks, moderate in insurance while people of risk profile prefer to invest their money
in bank deposits.
PIE CHARTS AND BAR GRAPHS
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1. An analysis of employee category with risk profile
EMPLOYEE CATEGORY WITH RISK PROFILE
0
10
20
30
EMPLOYEE CATEGORY
RISKPRO
LOW
MODERATE
HIGHLOW 14 21 2 7
MODERATE 14 4 5 14
HIGH 3 4 18 16
GOVT.
EMPLOY
PRIVATE
EMPLOY
SELF
EMPLOY
BUSINES
SMAN
Findings:
In the self-employed category there are 2 persons with low risk profile, while 5 in
moderate and 18 with high profile. Private employees having low and moderate riskare 4 each and 21 with low. Government employees are 14, 14 & 3 for low, moderate
& high respectively.
Interpretation:
Self- employed category is more risk taker while government employees are low risk
taker. So, in case of selling any product with high risk we can target self- employed
persons and private employees while in case of low risk we will target government
employees.
2. An analysis of age category with attractive factors:
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AGE CATEGORY WITH ATTRACTIVE FACTORS
0
5
10
15
20
Growth
return
risk
value
Growth 19 12 8 3
return 18 14 3 6
risk 12 8 4 1
value 6 7 1 0
BELOW-30 31-40 41-50 51-above
Interpretation:
By this graph we find that people of low and 41-50 age category look for growth in
their investments, people of age category 31-40 and above 51 look for return. So, we
can pacify them accordingly. They are not much attracted towards risk and values.
3. An analysis of investment type with employee category:
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INVESTMENT TYPE WITH EMPLOYEE CATEGO
0
2
4
6
8
10
12
14
16
18
Bank deposit
PO Scheme
Stock
Mutual Fund
Govt. Securitie
Gold
Insurance
Bank deposit 5 12 5 2
PO Scheme 3 6 3 1
Stock 1 10 5 11
Mutual Fund 0 3 3 7
Govt. Securities 4 2 2 1
Gold 1 2 2 0
Insurance 17 4 5 5
govt.
employee
private
employeeself employed businessman
Interpretation:
In this graph we find that government employees go for insurance, private employee
and businessman for stock.
There are more number of employees who in self-employed category do not know
whether they go for long term investment or short term investment.
4. An analysis of gender with risk profile.
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GENDER WITH RISK PROFILE
0
10
20
30
40
50
RISK PROFILE
NO.OFRESP
ONDEN
MALE
FEMALE
MALE 19 33 41
FEMALE 18 8 3
LOW MODERATE HIGH
Findings:
In low risk profile, females are 18 and males are 19. In moderate females are 8 and
males 33 and in high females are 3 and males are 41.
Interpretation:
It is found that females are risk-averse and go for small saving instruments. On the
other hand male are more risk taker.
5. An analysis of income category with risk profile.
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IN C O M E C A T E G O R Y W IT H R IS K
0
20
40
INCO ME CATE G
NO.OFRESPONDENTS
LO W
M OD E R A
HIGHLO W 8 16 10 3
M OD ER AT 0 10 23 8
HIGH 0 2 12 30
B E L O W
L A K H
1 L A K H
3 L A K H
3 LA K H
5 LA K H
5 LA K H
A B O V E
Findings:
30 people having income more than 5 lakh are risk taker. 23 in 3lakh-5lakh are
moderate risk taker while below 3 lakh are of low risk profile.
Interpretation:
We get the result that low income people are risk-averse. So, if we go for small saving
instruments we should hit our target on low-income people. But, as the income
increases people take more risk.
6. An analysis of employee category with investment instrument.
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GOVT. EMPLOYEE WITH INVESTMENT INSTRUMENTS
16%
10%
3%0%
13%3%
55%
Bank depositPO Scheme
Stock
Mutual Fund
Govt. Securi ties
Gold
Insurance
Findings:
55% respondents are interested in bank deposits, 18% insurance, 13% government
securities 10 % in post office scheme and 3% each in mutual fund and gold.
Interpretation:
By this graph we find that government employees prefer to invest in insurance and
then bank deposits etc. So, we can target them accordingly.
7. An analysis of self employed people with investment instrument.
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SELF EMPLOYED WITH INVESTMENT INSTRUMENTS
20%
12%
20%12%
8%
8%
20% Bank depositPO Scheme
Stock
Mutual Fund
Govt. Securi ties
Gold
Insurance
Interpretation:
By this graph we find that self-employed people prefer to invest in stocks and mutual
funds and then go for insurance etc. So, we can target them according to the
investment instrument available.
8. An analysis of age category with investment type.
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AGE CATEGORY WITH INVESTMENT TYPE
0
10
20
30
40
LONG TERM INV.
SHORT TERM INV.
CANT SAY
LONG TERM INV. 31 20 8 4
SHORT TERM INV. 7 6 2 3
CANT SAY 7 5 0 0
BELOW 30 31-40 41-50 51-ABOVE
Findings:
In below 30 years age group, 31 respondents are in low term investment, and 7 cant
say, in 31-40 years age group 20 are in long term investment and 5 cant say, in 41
50 age group 8 are in long term investment.
Interpretation:
We find that low age category group, go for long term investment and also there are
higher numbers of people who do not know that whether they prefer long or short
term investments.
9. An analysis of private employee category with investment instrument.
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PRIVATE EMPLOYEE WITH INVESTMENT INSTRUM ENTS
31%
15%26%
8%5%
5%10% Bank deposit
PO Scheme
Stock
Mutual Fund
Govt. Securities
Gold
Insurance
Interpretation:
By this graph we find that private employees prefer more bank deposits and stocks.
So, we can target them for these instruments.
10. An analysis of age category with risk profile.
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A G E C A T E G O R Y W IT H R IS K P
0
10
20
30
LO W
M ODE RA
HIGH
LO W 15 17 5 0
M ODE RAT 12 18 6 7
HIGH 28 6 5 3
B E LO W -30 31 -40 41 -50 51-A BO VE
Interpretation:
In this graph, it is very clear that low age category people are the person of high risk
taker and as the age increases they become risk averse. They shift towards moderate
risk takers.
LIMITATIONS
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The study was conducted in New Delhi city with survey being done in various
parts of South Delhi region only. Therefore the findings of the study may not be
universally applicable.
Due to lack of time survey was done on small sample size which may not be
representative of whole sample unit.
The study was conducted in the smaller time frame, since then consumer
choices for investment are subject to change, so the findings of the study may not
be fully relevant at all future time period.
Some respondents might have given biased answers, which might have an
impact on the findings of the studied.
CONCLUSIONS
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Investment decisions are influenced by various motives. Some people invest in a
business to acquire control and enjoy the prestige associated with it. Some people
invest in expensive yachts and famous villas to display their wealth. Most investors,
however, are largely guided by the pecuniary motive of earning a return go hand in
hand. While investors like returns they abhor risk. Investment decisions, therefore,
involve a tradeoff between risk and return.
From the study it is clear that people of low income generally go to invest
in small saving accounts while people of high income besides these also invest in
securities markets. As the income increases, more and more options are available.
Age can affect the investment decisions for buying an investment
instrument. People of low age group prefer securities markets, but higher age group
prefer insurance and bank deposits.
Investment decision is influenced by the category of employee in which
he belongs. In my study I got that government employees generally go for insurance,private employees go for bank deposits and stocks while self- employees go for
stocks.
I also found that females are risk averse. So, bank can target females for
small saving instruments like saving accounts etc and due to the risk taker nature of
males, bank can target males for its stocks, mutual funds and insurance etc.
We find that people of low and 41-50 age category look for growth in their
investments, people of age category 31-40 and above 51 look for return. So, we can
pacify them accordingly. They are not much attracted towards risk and values.
RECOMMENDATIONS
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Bank should target the customers according to income category. High income people
can invest in various instruments available like stocks, mutual funds, insurance etc.
Low income people invest their money in small saving instruments like saving
accounts etc. So, bank can target its customers accordingly.
Due to the risk averse nature of females bank can target females for those investment
instruments where there be no risk.
From the study, I got that government employees do their more investment in
insurance while private and self-employees invest in stocks etc. So, bank can target
accordingly.
Young generations are more risk prone in comparision to old generation. So, bank
should target young generation for its instruments related to risk and old generation in
which less risk be attached.
Mostly people invest when they find there are growth and return. They are not
attracted by risk and value. So, bank should pacify their customers accordingly.
EXHIBITS
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QuestionnaireDate: ___ /_07 /2008
Dear Sir/Madam,
I the student of MBA 07-09 batch of FMSR, AMU, am conducting a survey for my
project. I would be obliged to you for your co-operation in responding to thefollowing questions:
Q1. Which category do you belong to?
a. Government employee b. Private employee
c. Self-employed d. Businessman
Q2. Which age category do you belong to?
a. below-30 b. 31-40 c. 41-50 d. above 51
Q3. Your Gender?
a. Male b. Female
Q 4. In which investment instruments do you mostly like to invest?
a. Bank deposits b. Post Office schemes c. Stocks
d. Mutual Funds e. Government securities f. Gold
g. Insurance
Q5. Which annual income group do you belong to?
a. less than 1 lakh b. between 1 lakh 3 lakh
c. between 3 lakh 5 lakh d. more than 5 lakh
Q6. What is the level of risk you can withhold while making investment?
a. Low b. Moderate c. High
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Q7. What kind of investment do you like?
a. Short term investment b. Long term investment
c. Cant say
Q8. Which things you consider most while making investment decisions?
a. Expected return b. Expected risk
c. Expected growth d. Expected value
Q9. What feature or flexibility you expect from investment companies?
a. Low premium b. More Return
c. Less policy period d. Fixed return
BIBLIOGRAPHY
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www.nse-india.com
www.standardchartered.com
www.kotakmahindra.com
www.bajajallianz.com
www.economictimes.com
www.investment.com
http://www.nse-india.com/http://www.standardchartered.com/http://www.kotakmahindra.com/http://www.bajajallianz.com/http://www.economictimes.com/http://www.investment.com/http://www.nse-india.com/http://www.standardchartered.com/http://www.kotakmahindra.com/http://www.bajajallianz.com/http://www.economictimes.com/http://www.investment.com/